Bulk services agreements are those agreements entered into between a condominium association or homeowners association and a company for providing similar services to the community’s entire membership. These are most commonly used for providing the community with broadband services, such as phone, cable and internet service. The benefit of bulk services agreements is that the services are provided at a significant discount from the average retail price for the members. This blog post will provide an overview of Florida law concerning a community association bulk services agreement.
Pre-Turnover Bulk Services Agreements With the Developer
Many times, the developer of the condominium association will enter into a bulk services agreement with a services provider prior to turnover. This is usually done so that the developer can offer the units for sale with the additional incentive of already coming with cable and internet services. The Florida Condominium Act (the “Act”) allows for the developer to enter into such agreements on behalf of the association so long as the agreement is fair and reasonable. Fla. Stat. § 718.302(4). The cost of the bulk services is included in the association’s yearly budget and is paid for by each unit owner through the regular assessment payments.
Unit owners do have the ability to terminate pre-turnover contracts entered into by the developer. The contract can be cancelled with an approving vote of not less than seventy-five (75%) percent of the voting interests other than the voting interests owned by the developer. Fla. Stat. § 718.302(1)(a). Florida courts have held that the statute allowing the owners to cancel contracts made by the developer prior to turnover applies to cable television service agreements. Comcast of Florida, L.P. v. L’Ambiance Beach Condo Ass’n, Inc., 17 So.3d 839 (Fla. 4th DCA 2009).
Post-Turnover Bulk Services Agreements Entered Into By The Owner-Run Board
Post-turnover, owner-run condominium association board of directors have the ability to enter into bulk services agreements. If provided for in the declaration, the cost of communication services, information services, or internet services obtained through a bulk contract is a common expense of the association. Fla. Stat. § 718.115(1)(d). Even if the declaration does not include the cost of such services as a common expense, the board may enter into such a contract and, pursuant to the Act, the cost of the service will be a common expense. Id. The cost for the services under a bulk services agreement may be allocated to the owners on a per-unit basis rather than a percentage basis even if the declaration provides for other than an equal sharing of common expenses. Id.
A bulk services agreement must be for at least two (2) years. Id. Any contract made by the board may be cancelled by a majority of the voting interests present at the next regular or special meeting of the association. Fla. Stat. § 718.115(1)(d)1. Any member may make a motion to cancel the contract, but if no motion is made or if the vote fails, the contract shall be deemed ratified. Id. If an owner is receiving broadband media services but has failed to pay for that common expense, the association may use its lien enforcement authority pursuant to the Act and its governing documents to enforce payment of such costs. Fla. Stat. § 718.115(1)(d)2.
Unit Owner Rights Under A Community Association Bulk Services Agreement
A bulk services contract must provide that any hearing-impaired or legally blind unit owner who does not occupy the unit with a non-hearing-impaired or sighted person may discontinue the cable or video service without incurring disconnect fees, penalties, or subsequent service charges, and the unit owner is not required to pay any common expense charges related to such service. Fla. Stat. § 718.115(1)(d)2. Also, any unit owner receiving supplemental security income under Title XVI of the Social Security Act or food assistance as administered by the Department of Children and Families may also discontinue the service without additional fees or expenses. Id. If fewer than all owners of the association share the expenses of cable or video service, the expense shall be shared equally by all participating unit owners. Id.
Even if an association has entered into a bulk services agreement, an owner and/or tenant may still obtain the services of another broadband services provider of his or her choosing. No resident, whether tenant or owner, shall be denied access to any available franchised or licensed cable television service. Fla. Stat. § 718.1232. The owner or tenant who chooses to obtain his or her own services must pay for those individual services and is still obligated to pay the per-unit cost under the bulk services agreement while that agreement is in place. Moreover, no owner or tenant shall be required to pay anything of value in order to obtain such service, except those charges normally paid for similar services and except for installation charges as agreed to between the resident and the services provider. Id. In other words, the association cannot add a surcharge or additional fee to the cost of the services.